Some Potential Implications Of The ENaira – FBNQuest


After an earlier postponement due to a clash of date with the Independence celebrations, the Central Bank of Nigeria, CBN, recently launched the much-awaited Nigeria’s Central Bank Digital Currency (CBDC), or the eNaira. It is part of the apex bank’s initiatives to deepen the nation’s monetary sector.

Unveiled by President Muhammadu Buhari the eNaira is the digital form of the country’s physical currency. At that event,the Governor of CBN, Godwin Emefiele, disclosed that  500 million eNaira ($1.21 million) had already been minted. The CBDC’s digital currency app and its merchant wallet also became available for download after going live. Also, on launch day, the eNaira already had 33 banks integrated into it, recording a daily hit of over 2.5 million visits to the website. With N200 million already issued to financial institutions, over 2,000 customers on-boarded and over 120 merchants successfully registered on the platform at inauguration, it’s safe to say that CBN is properly primed for the digital experience.


The introduction of eNaira is a milestone for the country as Nigeria is one of only a few countries in the world and certainly the first in Africa to develop an official digital currency. For most Nigerians, there is still some level of confusion over what an ecurrency exactly is and what difference, if there is, between it and the physical cash.

It is important to state for the purpose of educating the public that eNaira is simply a home-grown digital currency equivalent to the paper Naira. It is issued by the CBN in line with Section 19 of the CBN Act and in essence, it is a direct liability of the CBN. The eNaira is built on a blockchain open ledger technology that prevents duplication or creation of fake units, each eNaira note will be unique and different. It is pegged against the traditional Naira and will not fluctuate due to market influence at a different rate from the traditional Naira.

The eNaira wallet is required to access, use and hold the eNaira which will be made accessible only through it as the digital storage that holds the eNaira. The digital currency is also exchangeable for other Central Bank Digital Currencies (CBDC) and it is also a legal tender. It will form part of the currency-in-circulation. More importantly, the e-naira will be at par with the physical Naira, maintaining the same exchange value as the Naira.


Experts are exuberant about the in-built benefits of eNaira. According to them, the major advantage that the e-naira brings to the table is the capability to deepen financial inclusion a major policy plank of the Emefiele administration and is expected to ease financial transactions and affect individuals, businesses, non-governmental organisations (NGOs), religious institutions, Diaspora Nigerians, ministries, departments and agencies, MDAs as well as other users of financial instruments.

As this newspaper understands it, the eNaira, will be easier for banks as well as the government to track spending as a way of increasing credit, particularly for small and micro businesses. The apex bank has assured that with eNaira, things cannot possibly go wrong because it gives it the leeway to exert a measure of control on the market to discourage abuses, fraud and sundry unforeseen happenstances that usually assail the fintech space.


We are encouraged that the CBN deliberately built safeguards around the eNaira, in a manner that will make it a safer medium of financial transaction than the cryptocurrency. Like every other policy instrument, the CBDC is work in progress that will require regular fine-tuning to ensure its efficiency and effectiveness. It was in this regard that eNaira wallet taken off the platform for upgrade purposes and was restored in no time.

It’s projected that within the next decade, national digital currencies would become the dominant player in the e-transaction ecosphere. Players in the financial sector are impressed about its seamless efficiency and ability to improve monetary policy operations across frontiers.


However, it is not out of place to recall the hesitancy that greeted cryptocurrency around the world. But there are assurances that the apprehensions hovering around it will not affect national digital currencies.  It is pertinent to point out that whereas cryptocurrency tend to compete with respective local currencies, CBDCs only complement local currencies. In Nigeria, the eNaira complements the physical naira.

Furthermore, CBDCs have the capacity to foster economic growth through better economic activities, increase remittances and improve financial inclusion. We note at this point that Nigeria is a heavy beneficiary of remittances, commanding one of the highest numbers of Diaspora transfers in the world. The eNaira will play a bigger role in this regard.

As we welcome this new financial instrument, we are compelled to advise the issuing authority, in this instance, the Central Bank of Nigeria to ensure that it achieves the purpose for which it was developed and presented to Nigerians.


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